Barnes & Noble’s new Nook, the Simple Touch Reader, aims to compete with the paperback - but it's a direct competitor to the Kindle with an E-Ink based touch screen.

The new Nook combines all the best features of the Kindle and of touchscreen tablets. According to Barnes & Noble CEO William Lynch,  it is aimed at “those turned off by buttons, keyboards and complexity” and he made reference to a customer request "for the perfect Christmas gift for my grandmother".

The Simple Touch is WiFi only, has a  6” black and white touchscreen, weighs 7.5 ounces, and promises up to 2 months of battery life on a single charge. Its key feature is that it has only one button - a menu button - apart from the power switch on the back and it has a touch-enabled screen (although you can use page turn buttons built into its frame).

The Nookcolor reader also offers a touch screen but it uses a standard color display and it doesn't work as well as the Kindle under natural light. It also doesn't have as long a battery life (8 hours) as an E-ink based device. The new Nook combines an E-ink display, which can be read in bright lighting conditions, with a long battery life with a touch screen.

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Another new feature announced at the launch, Nook Friends, can be seen as a response to the social features introduced by Kindle. It will let users to see what their friends are reading, and to share, recommend, lend and borrow books via MyNook.com, a website that will launch next month which will also let users shop from any computer.

The Simple Touch Reader will start shipping on  June 10, priced at $139. Meanwhile prices of the original Nook will drop to $119 for WiFi and $169 for 3G and both devices will be phased out once existing stock is sold.

It is rumoured that Amazon have some new versions of the Kindle in the works but so far there is little hard detail. Clearly if Amazon want to keep up they need to provide a reader that has a similar display technology, with touch input and long battery life.